K.G. MOHAMMAD KASSIM Vs. A. RAHMATHULLA

JUDGEMENT

(1.) The Defendant in Original Suit No. 5966 of 1969 on the file of the Third Assistant judge, City Civil Court, Madras is the Appellant. The Plaintiff and the Defendant were carrying on business under the name and style of M/s. Grand Dresses, a firm duly constituted under the Indian Partnership Act from 14th March, 1964. The business of the firm was in the manufacture and sale of ready -made garments. There were some disputes between the parties. It was agreed that the firm was to be dissolved and that all the assets and liabilities were to be partitioned equally between the parties. The stock -in -trade was divided between them and the Defendant agreed to take over the goodwill and tenancy rights relating to the office and tailoring premises on the understanding that the Defendant should prepare and submit the account of the firm within one month ending with 19th April, 19(sic)9 and that the amount found due to the Plaintiff shall have to be paid in 12 equal monthly installments commencing from 10th April, 1969. The Plaintiff and the Defendant have also divided some of the movable assets like sewing machine and other articles. The Plaintiff alleged that the Defendant, failed and neglected to finalise the accounts of the firm inspite of several demands made upon the Defendant from 10th March, 1969. There were some payments made by the Defendant to the Plaintiff and the Plaintiff claimed that in the absence of proper compliance with the understanding between the parties, the firm should be dissolved, that an account should be taken of all the assets and liabilities of the firm and that there should be division of the profits in equal moieties between the Plaintiff and the Defendant. There was also a prayer for appointment of a Receiver to continue the business till the share of profit and amount of goodwill is paid to the Plaintiff.

(2.) The Defendant resisted the suit. He admitted that he entered into a partnership with the Plaintiff and that there was also an agreement to dissolve the firm from 10th March, 1969. He, however, disputed any agreement to become entitled to the good -will or tenancy rights or to any agreement to prepare and submit an account of the firm within 10th April, 1969. He pleaded that in pursuance of the agreement he had made payments to the Plaintiff amounting to Rs. 50,375 and with reference to any balance, according to the Defendant, the remedy was not for dissolution of the firm and for accounts, but for recovery of the amount due under the agreement. There was also an additional written statement contending that no amount was due to the Plaintiff and that the sum paid after dissolution completely discharged the Plaintiff. The goodwill was said to have become worthless, because the Plaintiff was running a competitive business under the name and style of M/s. Eversells and the Defendant was also entitled to have an account of the profits of the said business. With reference to this counter claim , the matter was provisionally valued at Rs. 100 and court -fee paid thereon. In the reply statement filed by the Plaintiff, it was contended that even according to the account produced by the Defendant, a sum of Rs. 87,000 had to be paid to the Plaintiff. When the deed of dissolution provided for taking of all the accounts, the accountable relationship between the Plaintiff and the Defendant was said to have not ceased. The Plaintiff contended also that his starting a separate business after dissolution was not in any manner prohibited by the deed of dissolution. The suit for accounting was, therefore, said to be maintainable.

(3.) Relevant issues wore framed by the trial Court and it was held that the Plaintiff was entitled to the division of the profits in equal moieties that the payments already made by the Defendant to the Plaintiff were true and that the Plaintiff was entitled to half of the outstanding and half share in the goodwill. It was also held that the suit, as framed, was maintainable. The result was, that all the issues were found in favour of the Plaintiff and against the Defendant and the suit was accordingly decreed as prayed for with costs. A preliminary decree for accounting was passed and a Commissioner was to be appointed for ascertaining the assets and liabilities of the firm and dividing the profits and liabilities in equal moieties. The counter -claim was dismissed. The present appeal has been filed by the Defendant against the judgment of the learned trial Judge.